Skip to main content

View Post [edit]

Poster: dead-head_Monte Date: Feb 10, 2012 10:07am
Forum: occupywallstreet Subject: Mortgage Deal - another handout-giveaway for Banksters!

Occupy Wall Street needs to know about this!

Yves Smith was interviewed on the Democracynow newshour program today, on the War and Peace Report. She is a financial analyst who runs the popular finance blog, "Naked Capitalism." Smith is the author of the book, ECONned: How Unenlightened Self Interest Undermined Democracy and Corrupted Capitalism.
• 50-State, $25 Billion Mortgage Settlement:
Relief for Struggling Homeowners? - OR - Bailout for Big Banks?


YVES SMITH: "The real problem is that this deal is just not going to give that much relief. The mortgages are underwater — in the U.S., $700 billion. Even the most generous estimate of how much relief that this deal will provide is $35 billion to $40 billion. I mean, that just isn’t that much. And the notion that homeowners who were foreclosed on are going to get a $1,500 to $2,000 check, I mean, we’ve just basically said the price of fraud is $1,500 to $2,000."

JUAN GONZALEZ: Well, that’s what I wanted to ask you about, this whole idea that these 750,000 people who lost their homes, and through processes that clearly now were fraudulent, in terms of the robo-signing that we’ve had the judge from Brooklyn here talk about several times, that basically now these banks and their companies that participated in this massive fraud, in terms of signing these documents, are now off the hook.

YVES SMITH: Well, it’s even worse than that. I mean, [U.S. Attorney General] Holder sort of alluded to it: he said that the servicers actually drove foreclosures. And that’s an astonishing admission. And it’s actually true, that there’s plenty of evidence that it isn’t just the paper — you know, the banks keep loving to talk about the paperwork. It’s the fact that the banks often charge abusive and impermissible fees. You know, there was a story by Gretchen Morgenson about a fellow who first got on this trail in the mid-'90s, a fairly — a man from a fairly wealthy family, who discovered that the banks had — when he tried to pay off a mortgage, there were $18,000 in — where they said he had paid light or he had made all the payments on time, and even he couldn't win in court, because just the evidentiary burden — you know, getting the banks to even produce the records is quite difficult. So, there’s a whole 'nother layer of the story that this is papering over, about the banks' abusive practices and how they charge borrowers.

AMY GOODMAN: Well, you basically say the banks are getting parking tickets for felony offenses.

YVES SMITH: That’s about right.